What Sagen and RFA just clarified about spousal and equity buyouts

Do both spouses need to be on title when they separate?

No, and the timing is the part people miss. The requirement is that both parties are on title at the time you apply, not at the time you separated.

Sagen’s account manager was direct about this. If one partner was never added to title, even after 25 years together, matrimonial law does not override the program’s rule. The program looks at title, not at the length of the relationship.

This matters most for long term common law partners. If you have lived together for decades but only one name ever went on the deed, do not assume a spousal buyout is available to you. Confirm your title status first, because it changes which product we are even allowed to use. That single check can save you weeks.

Can my ex act as guarantor on my new home?

No. This came up as a real advisor question in the session, and the answer was flat: even in an amicable split, where an ex-spouse genuinely wants to help with a down payment, RFA cannot accept an ex-spouse as guarantor on the other party’s new purchase.

The guarantor rules that do apply:

Who wants to guarantor	Allowed?	Must they live in the property?
Immediate family member (parent, sibling)	Yes	No
Spouse or common law partner	Yes	Yes, they must live in it
Ex-spouse	No	Not applicable
Friend	No	Not applicable

I raise this early with separating clients because the plan people arrive with is often built on the assumption that a co-operative ex can prop up the new file. When that assumption fails at the underwriting stage, the whole purchase timeline slips. Better to find the real qualifying number now.

Is the equity buyout program only for spouses?

No, and this is the part most people miss entirely.

The same program that lets a divorcing spouse buy out the other, at up to 95% loan to value, is also available to:

• Siblings, parents, and other immediate family
• Friends who bought a property together
• Cousins, aunts, and uncles

An equity buyout mortgage is not really a divorce product. It is a co-ownership product that divorce happens to use most often. That opens up real options. Two friends who bought a duplex together in 2021 and now want different things do not have to sell it. One can buy the other out under the same program a separating couple would use.

The documentation differs from a marital separation. Instead of a separation agreement, family and friend buyouts need a signed document explaining the rationale and the amount. It is sometimes called a confirmation of acquisition. Lenders want to see the story behind the number, not just the number itself, partly to avoid the appearance of an unexplained transfer if the file is ever reviewed later.

Write it plainly, sign it, and state the amount. That is usually enough.

When should it be a refinance instead of a buyout?

A regular refinance is the right tool when either of these is true:

1. You want to pay off debts that are not named in the separation agreement. A dream vacation was the example used in the session. It cannot be funded through the buyout program, only through a standard refinance.
2. Your loan to value is already comfortably below 80%. At that point there is no need for the insured buyout’s extra borrowing room, and you avoid an insurance premium entirely.

Here is the shortest version of the decision I walk clients through:

Your situation	Likely the right tool
Buying out an ex, need above 80% loan to value	Spousal buyout program
Buying out a sibling, parent or friend	Equity buyout program
Someone off title, no money changing hands, family	Title change transfer
Below 80% loan to value, or debts outside the agreement	Standard refinance

None of these are decided by the label on your situation. They are decided by the numbers on your file, which is why I would rather look at them than guess.